KPIT Technologies has acquired production-ready system prototyping company Technica Engineering. The acquisition is a part of KPIT's strategy to focus on software-defined-vehicles (SDV).
In its filing to the National Stock Exchange of India, KPIT mentioned that € 80 million of fixed consideration will be paid over the next six months. Moreover, a maximum of € 30 million variable consideration based on achievement of revenue and profit milestones will be payable over the next 2.5 years.
The deal is expected to be closed by the end of October 2022, post fulfilment of customary closing conditions, and at the end of it, Technica Group will be fully owned by KPIT Technologies. The company further clarified that KPIT Technologies GmbH & KPIT Technologies Inc. (wholly-owned step down subsidiaries of the Company) will acquire 100% of the shareholding upfront.
Technica Group’s annual consolidated revenues are in the range of € 43 million at 20% EBITDA range. KPIT said the same will be consolidated proportionately upon closing of the acquisition.
Within the Technica Group, Technica Engineering Gmbh has a turnover of € 40.6 million for the year ended December 31, 2021, while Technica Electronics Barcelona S.L. reported revenues of € 2.76 million for the same time period. Technica Engineering Inc, US reported a turnover of $4.09 million for the year ended December 31, 2021. Incorporated in August 2022, Technica Engineering Spain S.L. is yet to complete its first financial year, and hence hasn’t reported its turnover for 2021.
Strengthening Value
Speaking about the acquisition, Kishor Patil, Co-founder, CEO and MD, KPIT Technologies, said the two companies have common clients, who will benefit from this acquisition.
“Mobility industry is using software to drive innovation and is creating a post-vehicle sale business model driven by delivering services to end consumers. We are constantly looking for possibilities to help accelerate our client’s vision. With Technica Engineering, we will strengthen the value and scale of operations across the stack,” he said.
Technica Engineering is headquartered in Munich and has a presence in Spain, Tunisia, and the USA, with a team of 600+ engineers. It specialises in prototyping a combination of network system architecture, hardware prototyping, integration, automotive ethernet products, and tools for validation.
SDV demands a significant change in the electronics architecture, moving from distributed-low-compute devices to central-high-compute. Rapid prototyping of high-compute hardware and vehicle architecture is critical to validate changes in architecture as the industry makes this transition, a statement issued by the companies said.
Joseba Rodriguez Martinez, CEO, Technica Engineering said Technica Engineering joining hands with KPIT will help it scale and create leadership in the SDV space.
“Integration boundaries between system architecture, hardware, and middleware software are getting blurred. Our goal is to create production-ready system prototyping, network designs, communication drivers, tooling, and testing solutions that redefine the industry benchmark. The power of software competence of KPIT will make these solutions exponentially more valuable,” said Thomas Konigseder, CTO, Technica Engineering.
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